Moderate Growth in Insurance Business
Data based on Economic Times 24 May 2011
- The life insurance industry reported a growth of 8% in total premium income to . 2,86,500 crore in 2010-11 from . 2,65,450 crore in 2009-10 mainly because of increase in income by new policies. Total income is a combination of new and renewal premium.
- During the period, renewal premium went up marginally by 3% to 1,60,700 crore while new business premium income went up by 14.5% to 1,25,800 crore.
- Insurance companies took various initiatives to curtail the expenses. According to Life Insurance Council data, the number of direct employees has fallen from 2.67 lakh in 2009-10 to 2.42 lakh in 2010-11.
- The number of agents has also declined by 29.78 lakh to 26.47 lakh.
- They have shut down 553 branches to trim down costs. In addition, commissions paid to agents have come down.
- After completing 10 years of opening up, eight insurance companies have reported profit, including ICICI Prudential, SBI Life, Bajaj Allianz Life Insurance, Max New York Life and Kotak Life Insurance.
- The industry paid a total death benefit of 10,270 crore against 8,385 crore in 2009-10.
- As on March 2011, the number of in-force policies stood at 32.54 crore, arguably the highest in the world.
- The industry is high capital intensive with 31,437 crore capital deployed. Net investment by insurance companies has dropped to 36,684 crore in 2010-11 from 61,125 crore in the previous fiscal. The industry invested 506,895 crore in equity and 952,993 crore in fixed income instruments. Its investment in other instruments fell to 20,425 crore from 32,161 crore.
- As per UN population division projections, India’s population by 2015 will constitute 30% individuals under the age of 14 and a whopping 60% in the age group of 15 to 59 years, indicating a potential highgrowth prospect for the Indian Life Insurance industry.
- Household savings constitute 23% of India’s gross domestic savings in 2009-10, compared with 5% in Brazil and 15% in China.
- The insurance industry in India has risen to 9th position amongst 156 countries. Ten years ago, India was ranked 20th in the global insurance league table when the insurance industry opened to private players.